Many customers have asked how to setup SurvivalWare to run on a network so that a common data file can be shared. This is desirable when you have a controller updating monthly data for an owner or CFO, and both want access to the data. Keeping the data on the network is nice for a single user as well. That way, the data is backed up regularly whenever the network is backed up.

This blog article shows you how to point SurvivalWare to access data in a shared folder. We will publish Part 2: Sharing custom logic and reports in a later article.

Here’s how to share SurvivalWare data on a network:

1. Set up a common data folder on the network (you may need to get a network administrator to do this for you)

2. Copy the files from the data folder on your local PC to the network folder.

NOTE: If you are using the Simple model, the data folder is called c:\survware\simple\data\. If you are running the FortKnox model, it is called c:\survware\FortKnox\data\.

Then from each PC running SurvivalWare:

3. In User Settings, set the default data path to this new network folder

4. Open your MTX file on the network by selecting File / Open Existing Company

NOTE: If two people open a SurvivalWare file at the same time, the person who saves last “wins” – i.e. any changes made by that person prior to saving will be the changes saved in that file.

Example:

The contents of the local data folder have already been copied to the S: drive on the network.

Building a business is about constantly testing and evaluating business models to see what works best. You often have to take a leap of faith because the outcome of a major decision – such as a project – or a new marketing campaign – or an acquisition – is uncertain and unknowable. Yet you don’t do these things blindly. You have certain expectations about what will happen and when you’ll know if something is a success. “Look Before You Leap” means that you state these assumptions and expectations explicitly, and analyze what might happen from a financial standpoint.

Back of a cocktail napkin is a good place to start. But then things can get complicated as you learn and pivot and spend and invest and pivot some more. All of a sudden you have employees and leases and inventory and receivables. A portfolio of credit cards becomes a major source of working capital.

So how much is this project XYZ going to cost? Month by month?

What impact will it have on sales? Margins? Month by month? Also: what are the ranges of possible values? Best case? Worst case?

Suppose I sell licenses only and not subscriptions? How about the other way around?

What if customers take 45 days to pay?

How much money do I need?

Look before You Leap with Financial Modeling.

Financial modeling is a tool that allows you to look at different business models “on paper” first. Unless you have unlimited funds, you need to plan each move carefully. Over time things get more complex. There are many moving parts. You can’t keep track of everything in your head.

You start with the facts. This is where you are today. Cash, Inventory, Debt, recent sales. A few years of monthly financial statements if you’ve been around that long.

The financial model is a structure to accumulate this data and make sense of it. It also allows you to peek into the future

This is what SurvivalWare is all about. It is a tool to help you Look before You Leap.

The SurvivalWare Experience

You first look at historical performance to inform your decisions about what is possible going forward.

You look at trends graphically, efficiently, with push button ease.

The provided financial models show you everything you need to make assumptions about in order to do a complete financial projection (Income Statement, Balance Sheet, and Cash Flow).

You can base your assumption on history or on judgement. Or “back of the napkin” sketches. Days of market research. Coin flip. Whatever.

You look at what happens to the cash as the end result of everything else.

The secret about financial modeling is that the income statement and the balance sheet have to be in balance. Once you’ve got estimates for everything else, your cash balance is the plug. It is the end result of everything that goes on in the business. The model calculates cash for future months based on your assumptions about sales, inventory, receivables, expenses, credit cards, etc. etc.

If you decide to take this step – do it right! Call or email to arrange a free consultation. Let us help you get your data loaded, and give you some pointers on how to peek into the future financially.

We just put the finishing touches on the content for today’s webinar featuring Philip Campbell and his Cash Flow Focus report. The Cash Flow Focus Report is designed to help you understand your cash flow in 10 minutes or less each month. There are still seats available – so please register if you haven’t already. A link to the recorded webinar will be sent to all who register.

In addition to Philip’s spiel, I’ll be showing off some of the features in SurvivalWare Simple, which we are officially releasing today. Another reason to register for today’s webinar at 1:00 p.m. EDT – special discounts on our Concierge QuickStart service available until June 1, 2014. You have to watch the webinar to get the discount code!

5/21/2014

Here is a link to the recorded webinar. Depending on your browser, it may download the file first (about 93 MB). If it does, you can double click on the file after it downloads to view it on your PC.

I don’t see how you all put up with it. I’d pull my hair out. I’m talking about using Excel (or any spreadsheet tool) for financial modeling. To build and maintain financial models, that is. It’s fine if someone else built it for you , and all you have to do is put in a few numbers in well-marked locations, and view the results. And as long as you don’t have to trace back a formula so see how something was calculated. As long as there is no need to make sure the same calculation is used for each column in the model. Yikes, have you seen those formulas?! If anything is referenced outside your viewing area you are screwed.

Now don’t get me wrong. I love Excel. I use it every day. I import and store lists. I sort things. I maintain small databases. I keep a log of how many miles I ride my bike each day. I have another spreadsheet I use to keep track of my daily calorie consumption, exercise, and weight. It helped me lose 40 pounds, and keep it off still 5 years later. Like I said, I LOVE EXCEL! Just not as a financial modeling tool.

I’ve been spoiled. I’ve used an English like financial modeling language of one sort or another since 1977. (I’ve created two of them myself). My tool of choice nowadays is ENCORE! for the financial modeling language, and SurvivalWare for the infrastructure – i.e. getting data in, analyzing, reporting, graphing, exporting data to the dashboard tool of your choice for mobile and web access. Fortunately, you get these as a bundle when you buy SurvivalWare Pro. But I’d advise you to wait until the release of SurvivalWare Pro 2014. It is available in Beta test form now, but the formal release is scheduled for July 15, 2014 to accommodate a major refresh of documentation and training videos. There is a lot of new stuff including a Model Generator to make you incredibly efficient at developing models, without sacrificing the ability to fine tune calculations and report formats. Transparency is another big thing. Click on the new formula bar to see the English-like logic for any row in the grid. I could go on and on.

But back to my rant: Excel sucks as a financial modeling tool. There is just no other way to say it. I’m sitting here having to update the Simple Model Excel template file. I made some changes to the simple model based on suggestions from Philip Campbell after he used the model in a real live client engagement. The new “Disposable Spreadsheet” feature in SurvivalWare depends on a working Excel model that mimics the calculations of the Simple model. So I’ve been updating the Excel spreadsheet this morning, trying to figure out the cell references, and looking for any excuse to do something else. SurvivalWare Simple 2014 isn’t scheduled to be released until May 15th – so I have lots of leeway to procrastinate – over 2 weeks to update the formulas in a measly 150 row model.

Back to the grind: let’s see, here’s my formula for Annualized Sales down at row 49: =(B5+C5+D5)*4. Let me scroll up to the top to see what Row 5 is. And what columns B,C, and D represent. Now is this formula for October the same? =(I5+J5+K5)*4. Is that an I or a 1? So far so good. And here is Cash Flow From Operations for October: =K111+K112+K113+K119+K126. It doesn’t exactly roll off the tongue. You get my drift. This is the simple stuff. Imagine a complicated model.

SurvivalWare is a great conglomerator of data: financial, cash flow, and other. It also houses a good solid financial model. You can be pretty sure that the numbers coming out of SurvivalWare are calculated correctly. What SurvivalWare lacks is the immediacy and autonomy of a spreadsheet – to do stuff like take in crazy assumptions or do one-off KPI calculations. (You didn’t hear me say that!) The structure of SurvivalWare is nice – until it isn’t.

Introducing the Disposable Spreadsheet – to give you the best of both worlds. What is it? A spreadsheet created on the fly, whenever needed. It includes not just numbers, but the formulas underlying the SurvivalWare financial model. A complete financial model in Excel, populated with 12 months or more of history, and 24 months or more of projections. The inputs are clearly marked, as are the calculated cells. Note that the calculations for a given row can be – often is – different for projected months vs. historical months.

You can send the spreadsheet to the business owner or to a controller or CFO. A Tax planner. Consultant on a project that impacts cash flow. They can do their own what-if?’s in Excel. If you have a boss, you can load the marked up spreadsheet back into SurvivalWare. This is called “Recycling” the spreadsheet. The updated assumptions become part of the master data file in SurvivalWare, and available for analysis and reporting. These assumptions are the ones used next time a Disposable Spreadsheet is created.

Otherwise, toss the file in an archive bin in case you ever want to mine it, and move on to next month’s edition of the Disposable Spreadsheet.

Here’s what the disposable spreadsheet looks looks like for a sample data file from the SIMPLE model.

Sample DIsposable Spreadsheet

Currently, this (the Simple Model) is the only model it is available for. We are working on upgrading the Fort Knox model to do the same. As you might expect, the more complex the model, the harder to get it to work reliably in Excel. The Fort Knox Disposable Spreadsheet Feature should be available in March when we release SurvivalWare 2014. (Luckily nobody reads this blog, so I might have a little wiggle room on the date).

Right now, the way you create a spreadsheet with formulas is to go to the Projections Module and select the “Export Formulas” tab. You probably want more than a single month of history, so click “More” in the upper right to display more history months. This is what you see in SurvivalWare prior to the export.

It takes about 30 seconds or so to complete after you click the Export to Excel button.

The neat thing is that it is a piece a cake to read an updated Excel file back in. Just select File / Import from XLS File… Then select the file with the updated projections. SurvivalWare takes care not to change any history numbers during this process.

Last week I attended the inaugural meeting of the Philadelphia Franchise Association. It was a lunch meeting with about 30 minutes of networking at the beginning, a great Italian lunch (Maggiano’s), and a panel discussion afterwards. The topic of this meeting was near and dear to my heart; “How your franchisees can make more money & you get better numbers.”

Love Park in Philadelphia

Thanks to Tom Spadea of Spadea, Lanard & Lignana for organizing the event, and selecting such a great topic for discussion.

Marty Ferrill, CEO of Soft Pretzel Franchise System in Philadelphia, started off the discussion and emphasized how important it was to “know the numbers.”

The three panelists talked about how important working capital is to the success of new franchisees. They all stressed how critical it is to get monthly Income Statements from the field. I asked a question about Balance Sheets (after all – you need a balance sheet to monitor working capital). The consensus seemed to be that you need to walk before you run – and the income statement was a good place to start.

One of the panelists, David Gould, recalled how he used to be a field consultant, and the first thing he would do during a visit is look at the Zee’s Accounts Receivable. Anything over 30 days, he would call and say “I’m from the corporate office, and I noticed you have a past due amount. Can I stop by and pick up a check today?” He said he collected thousands of dollars for his Zees, and was pretty popular among them as a result.

Another panelist, Dana Kline, noted the importance of context. So you’re collecting all these numbers. Is a value good or bad? The Zees need guidance on what defines good performance, and what is not so good. I couldn’t agree more.

Someone from the audience asked about compliance: “how do you get the Zee’s to report their numbers?” Dana Kline said that you just have to make it part of the “system.” Tell them, “This is just how we do things.” Others chimed in that the franchisor should make monthly reporting a part of the franchise agreement. All agreed that feeding back useful information to the Zees was essential to achieving a high rate of compliance.

I talked to a couple of CPA’s in the audience who re-iterated how important Cash, Working Capital, and other Balance Sheet Data is to understanding the financial health of the Zees. Plus KPI’s that involve data outside the accounting system. One accountant mentioned to me that getting the data helps illuminate book-keeping problems. Many Zees scrimp on book-keeping and often leave it to untrained family members.

Joe Caruso (head of the Capital Area Franchise Association) talked about the need to know about debt service and whether a Zee can cover it. He cautioned that some of the debt may be outside the company books. He cited the example of a franchisee that takes out a home equity loan to help purchase a franchise, and sees his mortgage payments double from $2,000 to $4,000.

One of the panelists reminded the audience that success of the Franchisor depends on the success of the individual Franchisees.

There’s a great video summarizing the event with snippets from each of the 3 panelists, and interviews with members from the audience to get their reactions at the end. I’m the one 2:25 into the video who doesn’t know how to tie a tie.

My takeaway: It is critical for the Franchisor to actively monitor and analyze the financial performance of all Zees in the network. It’s not easy, but it has to be done. It’s a good thing there are tools like SurvivalWare that ease the burden of collecting financial information in a common format so that it can be properly analyzed. The cash flow projections are icing on the cake.